The British pound did little but consolidate between 1.85 and 1.86 during Tuesday’s trading session, which is nothing compared to the 200-400 point ranges we’ve been seeing lately.
evertheless, the quieter price action suggests the bullish momentum that had pushed GBP/USD higher has died down for now. However, according to Senior Strategist Jamie Saettle’s Daily Technical Report, a drop in the pair toward 1.83/1.84 could present a buying opportunity as Cable is likely to ultimately target a zone of resistance at 1.88. Meanwhile, UK economic data has been just as dismal as one would expect with mortgage approvals, as measured by the British Bankers’ Association (BBA), plummeting 64 percent in August from a year earlier to 21,086. This is the lowest level since record-keeping began in September 1997, and highlights the severity of the housing collapse in the UK. This presents even greater risks to the UK economy and financial markets, but the Bank of England has thus far been relentless in their effort to keep monetary policy restrictive, as UK CPI has rocketed well past their 2 percent target and 3 percent ceiling in recent months. Regardless, this is an old story for the UK and with no key economic indicators scheduled for release this week, GBP/USD price action will depend more upon US dollar flows and technical levels.
Related Article: British Pound/US Dollar Currency Pair Forecast to Appreciate
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